The origin of poverty in Indonesia

Abstract

The causes of Asian poverty are usually discussed by economists, sometimes by sociologists. Historians tend to avoid the long-term sources of the problem, perhaps because of an assumption that the problem is unreal. The origins of capitalism and of the industrial revolution lie in Europe, and therefore the causes for the enormous gulf in living standards between Europe and Southern Asia in the twentieth century are also assumed to lie in Europe. The assumption behind this one-sidedness is that the dynamic of change lay in Europe while most of the rest of the world, including Indonesia, has been relatively inert and unchanging. In reality, change has been the rule of Southeast Asia as in Europe, and we must examine the pattern of this change to understand both the relative and the absolute dimensions of poverty.